Knutsford Express Services Limited (KEX) Annual General Meeting will be held at 1310 Providence Drive, Ironshore, Whitesands Beach, Montego Bay, on Wednesday, October 25, 2017, at 10:30 a.m.

Paramount Trading (Jamaica) Limited (PTL) Annual General Meeting will be held on Saturday, November 4, 2017, at The Knutsford Court Hotel, 16 Chelsea Avenue, Kingston 5 at 10:00 a.m.

Seprod Limited (SEP) has advised that Mrs. Glenise Freckleton has joined their Executive Management as the Group Strategy and Planning Manager, effective October 2, 2017.

KLE Group Limited (KLE) Annual General Meeting will be held at Tracks and Records, Unit 8, 67 Constant Spring Road, Kingston 10, St. Andrew on Tuesday, October 24, 2017, at 8:00 a.m.

The JMMB Group Ltd (JMMBGL) has advised that Ms. Patricia Kaye Aarons  has been appointed to the Board of Directors of JMMBGL effective September 28, 2017.

Proven Investments Limited (ProvenJA) has advised that at a Board of Directors’ meeting scheduled for November 2, 2017 an interim dividend payment will be considered for both ordinary and preference shareholders.

 Scotia Investment Jamaica Limited (‘the Company”) has announced that the Supreme Court of Jamaica has approved and sanctioned the Scheme of Arrangement pursuant to which stock units in the Company (other than those held by Scotia Group Jamaica Limited) will be cancelled in consideration for cash payments J$38.00 per stock unit (payable to stockholders in Jamaica currency or, at their election, in United States currency but in United States currency only in the case of stockholders whose stock units are cross-listed on the Trinidad and Tobago Stock Exchange). T

Jamaica Broilers Group Limited (JBG) JBG has declared an interim dividend of $0.17 per share payable on November 3, 2017 to shareholders on record as at October 10, 2017. The ex-dividend date is October 6, 2017.

ANSA Coatings International Limited has advised all minority shareholders of Berger that the Offer dated August 31, 2017 to acquire the shares of Berger at a cash price of $10.88 per ordinary share which is scheduled to close September 28, 2017, has been extended to October 9, 2017 for acceptance. 

On September 18 2017, the local financial market is expected to see one of the largest inflows of USD liquidity into the market. This will involve payments totaling USD$526Mn from the prepayment of GOJ Fixed Rate 5.250% USD Benchmark Investment Notes 2020A and 2020B.

The liquidity injection has several implications for the local markets:

1.   Such large levels of USD liquidity will facilitate further reductions in interest rates and yields on USD denominated money market instruments.

2.   Increased USD supplies bode well for further support for the JMD/USD exchange rate, which has depreciated by just 2.1% since the start of the year relative to 6.3% for the same period last year. With foreign exchange gains expected to lower for the rest of the year, some investors may find it worthwhile to convert to JMD in an effort to participate in higher yielding local currency instruments.

3.   Investors will need a suitable investment product to place these funds. We believe that investments such as corporate bonds, global bonds and unit trust will benefit from this large inflow as investors seek to quickly reinvest in attractive instruments to prevent a decline in portfolio yields.

The liquidity event poses risks but also significant opportunities for your investment portfolio. The key to capitalizing on these opportunities is to position for long term growth and gains. The right mix of corporate bonds, Global bonds and Unit Trust products will help you to achieve this.

Suitable Investment Options for Investors

Local and Global Bonds

In light of lower interest rates on traditional investment products, investors have been taking advantage of higher yields on Corporate bonds to enhance portfolio returns. Due to the higher risks relative to the sovereigns, Corporate issues offer a premium above their respective Sovereigns. In addition, corporate bonds also provide the opportunity for further portfolio diversification given that issuers operate in various economic sectors. Based on their risk profiles, investors may consider various local corporate bonds that are available. The Inversiones Atlantida (Invatlan) 2022 out of Honduras is an option for the aggressive investors.

Alternately, moderate or conservative investors who want to less risk exposure may find Sovereigns such as the Aruba 2023s suitable.

Stocks

Improving economic conditions continue to provide the right environment for improvements in the profits of companies that are efficiently managed. This bodes well for increased returns to stock market investors. Of note, as at September 14 2017, the JSE Main and Junior market Indices have advanced 36.04% and 17.7%% respectively for the year. Also, with the earnings growth recorded thus far, valuations have fallen; with the average Main Market P/E at 9.71X YTD compared to 12.26X for the corresponding 2016 period. The decline in market multiples points to the fact that corporate earnings have been increasing faster than prices and there is still some room for prices to run. The anticipated increase in liquidity should have a positive impact on the stock market given expectations that some beneficiaries may find it profitable to convert their funds to JMD given lower USD returns. There are some stocks that we continue to find attractive from a valuation standpoint. These include JMMB Group and Jamaica Broilers Group.

Unit Trust

Moderate to aggressive investors who seek a more diversified portfolio of USD fixed income securities but are constrained by large minimum required investments should find the NCBCap Funds USD Bond Portfolio to be a suitable option. Additionally, investors with similar risk profile but opt to convert a portion of their funds for JMD investment should consider the Income Optimizer Portfolio. Long term investors seeking capital appreciation, exposure to bonds and other fixed income assets will find both portfolios attractive. These Unit Trust portfolios should benefit from the additional lift in GOJ Global bond prices and local Corporates’ performance driven by Jamaica’s improving fundamentals and favourable economic outlook. 

The proposed investment options will help to mitigate the impact of falling fixed income yields, reduce risks through diversification as well as enhance overall returns.

Speak to your NCB Capital Markets Wealth Advisor for further advice on how you should position for the impending event.